How Social Media is Upending the Enterprise

For decades, companies have defined the channels their customers must use to contact them. But phrases like, "We are available by phone weekdays from 9am until 4pm Eastern Standard Time,” and “We will attempt to answer the emails we receive within 48 hours, but times vary based on incoming volume” are quickly becoming a thing of the past. The long-held notion that companies control the conversation is being challenged by social media.

unitedbreaksguitars

In a world where any customer can, in seconds, tweet or post to Facebook a pithy product review or share an experience they had with a brand, companies are forced to entirely rethink how they interact with their customers. Step one, probably the hardest step, is realizing they are no longer in control. The power of social media has empowered the consumer to reach literally hundreds or thousands of people in seconds. And because we know a consumer’s closest friends are three to five times more likely to share the same preferences for products and brands, this newfound power is not to be underestimated.

Sure, companies have Facebook pages and Twitter accounts. Yes, a few thousand companies are already searching Twitter for mentions and engaging customers. This is only a start. The real transformation happens when the companies let go of the conversation and instead work to nurture it. The brands who offer tools to their customers to increase the amount of conversation and encourage their customers to discuss the pros and cons of their products will be the winners who emerge from this disruptive time.

Companies like Get Satisfaction and UserVoice offer tools that change the balance of power between a company and its customers. Get Satisfaction has a fantastic manifesto, or “Company-Customer Pact," which defines a new relationship between a brand and its customers, encouraging public dialog, warts and all, but expecting productive discussion in return for the company’s helpful engagement.

While product forums from companies like Jive Software have been around for many years, I believe public conversations about brands will now be distributed in nature, spread across the web into thousands of tiny corners. The challenge for companies is figuring out how to manage this. A conversation could start with a tweet, be directed to a help forum, be responded to in email, updated in a blog post, and then broadcast on Facebook. How will this be tracked, measured and monitored? This market is ripe with opportunity for both brands and software platforms built to nurture the distributed web-wide conversation. And brands who support a public dialog will engender more respect from their customers than those who turn a blind eye to it--or worse, try to shut it down. Ultimately, companies become more customer-centric from this disruption. I am sure United Airlines wishes they had just paid for the passenger’s guitar they broke now that the music video he recorded chronicling the ordeal spread virally and has been viewed more than five million times!

The company/customer relationship is but one relationship forever changed by social media. Similar transformations are happening between companies and their employees and companies and their vendors. New companies and tools will emerge to address these situations. At Venrock, we are looking for the entrepreneurs that are pioneering this space and embracing this opportunity.


David Pakman joined Venrock from eMusic where he was the CEO. Prior to joining eMusic, he was co-founder of Myplay, Inc., the broadband application services company that introduced the “digital music locker” and pioneered the locker category, later sold to Bertelsmann. Before Myplay, he was Vice President at N2K Entertainment, which created the first digital music download service. He also was the co-creator of Apple Computer’s Music Group. Pakman is a graduate of and a member of the Board of Overseers at University of Pennsylvania’s School of Engineering, serves on the Leadership Committee for the UJA-NY’s Music For Youth, and is an avid musician and songwriter.


Add New Comment

14 Comments

  • Rob Howard

    Successful companies put more value on the information than the application.

    Look at what Amazon has done for consumer buying or what Google has done for advertising. The key to this market is not on building the new 'it' application, but on helping companies understand how their brand is being discussed, what their customer perceptions are, and learning to innovate hand-in-hand with customers (many large enterprises now believe that the next set of innovations will come from outside the organization).

    I've been involved in this space for nearly 10 years now. Nearly 3 years ago Telligent (http://telligent.com) started investing in analytical tools to help our customers understand the data after being the first in the market to offer a suite based collaboration solution.

    Anyone can build the next forum, blog, wiki, twitter-clone, etc. they key is using the information to transform how the business measures, operates, and works with its customers and employees.

    So I agree, there is a major shift underway. But it has to be about more than just the tools...

    Rob Howard
    Found / CTO telligent.com
    @robhoward

  • Seth Rosenblatt

    David -- although I agree with your basic premise (and appreciate the reference to Jive Software), your characterization of Jive Software as product forums software is many years out of date. In fact, Jive addresses this exact problem you raise about the "big conversation" happening outside a company's four walls. Jive has a platform that not only allows companies to create both internal and external communities (and bridge those together), but also has a solution called Jive Market Engagement (http://www.jivesoftware.com/pr... which combines social media monitoring with the ability for a company to quickly collaborate on solutions and approaches to join in this larger conversation. We agree that once you take this approach it will completely transform (to the positive) a company's relationships with its customers, partners, and other constituents.

  • Mark Roberts

    The shift in power that social marketing has is most apparent in the selling process. Salespeople are no longer the keepers of the information keys. Social media can create momentum as discussed in my blog: http://nosmokeandmirrors.wordp... or shut you down within 24 hrs.
    Market leaders will adapt...
    Market losers will keep trying to "overcome objections"

    Mark Allen Roberts
    www.outbsolutions.com

  • Mark Roberts

    The shift in power that social marketing has is most apparent in the selling process. Salespeople are no longer the keepers of the information keys. Social media can create momentum as discussed in my blog: http://nosmokeandmirrors.wordp... or shut you down within 24 hrs.
    Market leaders will adapt...
    Market losers will keep trying to "overcome objections"

    Mark Allen Roberts
    www.outbsolutions.com

  • Julia Herniak

    Social shopping is become more critical as more people make their purchases on the internet. If there was a website that had a sales representative online 24 hours a day, then when someone is doing cooperative shopping, then they could join in the discussion and help the online shopper find the best product.

    Social shopping sites like http://www.zovue.com provide web page sharing in the online shopping environment. This means, if i am buying a coat from Nordstrom, they will see that i am online and they can do web page sharing with me, and show me some special deals in their store, or they can immediatley answer my questions. This is an important step since nobody likes to call a call-center in India when they have a question about a product.
    Online consumers need the answers right away.

    New patents are emerging, like one called Cooperative Shopping are emerging and will change the landscape of online shopping. http://www.freepatentsonline.c...

    Articles are being written about the importance of this type of technology. An article from http://www.1000heads.com/?p=57 explains the importance of this technology.

    Companies need to start moving toward technology that allows more real time communication on the internet.

  • Mark Roberts

    The shift in power that social marketing has is most apparent in the selling process. Salespeople are no longer the keepers of the information keys. Social media can create momentum as discussed in my blog: http://nosmokeandmirrors.wordp... or shut you down within 24 hrs.
    Market leaders will adapt...
    Market losers will keep trying to "overcome objections"

    Mark Allen Roberts
    www.outbsolutions.com

  • Luke Jones

    I literally having got a clue how the social media movement happened, it really has happened in what seems like an instant.

    Your post is one hundred per cent correct - now it's all about the consumer having a voice and being in control, not the other way around. It used to be that we were afraid of the corporations, but now they're afraid of us - and it's a great thing!!!

    --
    Traxor Designs: Freelance Website Design and SEO

  • thoughts dot com

    We at http://www.thoughts.com believe now is the time to have a good product. If your product or service is not living up to its promises people will know immediately. However, if you have a great product, this is the best time for it.

  • Nick DiGiacomo

    This is wishful thinking on the part of social media marketers who've never seen how a large public company is actually managed. The guitar incident, for example, had absolutely no effect on the behavior or market value of UAL Corp. http://blog.vanno.com/index.ph...

  • Chris Yates

    I totally agree that the consumer now has the voice. I worked in Broadcast TV for over 20 years and we used to have the message and thus the power. That is no longer the case.
    I enjoy this new system for sure because ideas and concepts are shared by many. This is affecting everything from the message to the marketing. Check out this link on push vs. pull marketing. http://www.huddleproductions.c...
    Hope it helps.

    --
    Chris Yates
    HuddleProductions.com
    Social Media + Video